Northeast Calgary hail victim left looking for answers after being dropped by insurance company
Two claims in five years too much to stomach for one insurance company
The registered letter from Aviva insurance arrived out of the blue in Inderpreet Cumo's mailbox last month.
He was being ditched as a customer. The reason? Two claims on his policy in five years.
Cumo's home in Taralake, like thousands of others in northeast Calgary, sustained extensive hail damage to the stucco, windows, roof and back deck in a huge hail storm last June. Two vehicles parked outside were also write-offs.
The damage from the storm resulted in tens of thousands of claims and an estimated $1.4 billion in damage. It was the fourth costliest natural disaster in Canadian history.
A condo Cumo owns was also damaged. He covered that $3,600 bill himself after factoring in the deductible. He said Aviva told him if he claimed for the condo and his home they would not renew his insurance.
Fast forward to January 2021 and a notice of cancellation arrived in the mail.
"We regret to inform you that we cannot continue to provide you with insurance coverage when your policy expires March 5," the letter read, Cumo said.
The reason given, Cumo said, was claiming on his policy twice in a five year period.
Cumo had successfully submitted another claim back in 2016 after his home was damaged by an earlier hail storm.
In that 2016 storm, two cars he owned were written off and the roof and house sustained hail damage.
"I talked to a representative with Aviva and she told me that based on their risk abatement we don't qualify for insurance," said Cumo.
The end of the five-year window in question is approaching this summer but Cumo said he had no luck asking the company to take that into account. His current claim with Aviva is going ahead, slowly, but he'll need to find a new insurer.
"It puts us in a bind. We're wondering where we are left. Is another insurance company going to pick us up?," said Cumo.
"How can a homeowner predict hail damage or another natural disaster? How are we more at risk when we can't control natural disasters?"
Cumo said he feels two claims in five years is entirely reasonable for a product he paid for. He said this is why he purchased insurance in the first place.
He's hoping that being dropped by his existing company doesn't make finding a new insurer difficult or costly. One company told him it won't insure him until the current damage is fixed, and that's taking time.
"How are they able to continue to get away with this stuff?" he said.
"When we go to renew, we're having to pay more."
Aviva said in an emailed statement that due to customer confidentiality, it's unable to comment on the specific case, but that the company regrets it is not always able to renew all policies.
"Each customer's circumstance is unique and we assess every case based on its merits," a company spokesperson said.
"We do not cancel a policy just because someone has had the misfortune of a loss or a claim. Every year we pay out millions in claims to help customers get back to normal. In evaluating a policy renewal, insurance companies consider many factors including the claims experience."
Cumo said he's tried talking to local politicians and others about the situation but doesn't have any answers.
"What about the people who can't deal with this? What if other insurance companies are doing the same thing to people?" Cumo said. "Is our government putting any sort of policies in place so insurance companies can't do what they want and how they want?"
Cumo is now busy calling around other companies to find a new insurer.
As unfair as it all seems for Cumo, the Insurance Bureau of Canada said Aviva can essentially do what it likes when it comes to deciding who it wants to insure, who it decides to drop as a customer and why.
It's unusual, according to the bureau, but it doesn't break any laws. Customers are fair game.
They say it all comes down to risk and how companies choose to spread that risk geographically.
"This is not a common practice within the insurance industry," said Rob de Pruis, the western director of consumer and industry relations with the Insurance Bureau of Canada.
Every company in Alberta is bound by the Federal Competition Act to prevent anti-competitive behaviour, which allows insurance companies to make independent business decisions based on their own level of risk.
"Some companies, every now and then, review their overall risk appetite and they make some internal decisions as to if they want to continue writing in a certain area, writing certain lines of business," said de Pruis.
"Insurance is all about risk. Every person's risk is going to be a little bit different … It may just be that particular insurance company has too many policies in one particular area and they're just looking to spread out their risk.
De Pruis said it's sometimes that simple and it's not always in the fine print.
The good news for Cumo is there's plenty of choices when it comes to getting re-insured.
In Alberta, there are more than 100 companies offering home, commercial and auto insurance.
"Even though one company won't want to write that risk there are probably a dozen or so other companies that would," de Pruis said.
He said there have been a couple of dozen bad storms in other parts of the city over the past decade and there will be more to come.
"These events are quite common. Calgary and southern Alberta just seem to be more in that hail-prone area. For decades the insurance industry has been offering policies and there's no indication that's going to change," he said.
De Pruis said insurance prices are based on multiple factors and not on one particular weather event, such as last summer's record-breaking storm.
He said there have been increases in severe weather but the industry is aware and still wants to offer products that reflect that.